The Financial Reporting Council (FRC) of Nigeria is a federal government agency established by the Financial Reporting Council of Nigeria Act, No. 6, 2011. It is a federal government Parastatal under the supervision of the Federal Ministry of Industry, Trade and Investment. The FRC is responsible for, among other things, developing and publishing accounting and financial reporting standards to be observed in the preparation of financial statements of public entities in Nigeria; and for related matters.
The Council’s main objects, as defined in the FRC Act, are to:
- protect investors and other stakeholders interest
- give guidance on issues relating to financial reporting and corporate governance to professional, institutional and regulatory bodies in Nigeria
- ensure good corporate governance practices in the public and private sectors of the Nigerian economy
- ensure accuracy and reliability of financial reports and corporate disclosures, pursuant to the various laws and regulations currently in existence in Nigeria
- harmonise activities of relevant professional and regulatory bodies as relating to corporate governance and financial reporting.
- promote the highest standards among auditors and other professionals engaged in the financial reporting process.
- enhance the credibility of financial reporting; and
- improve the quality of accountancy and audit services, actuarial, valuation and corporate governance standards.
The benefits of high quality Financial Reporting are numerous; amongst which are:
- promoting private sector growth and reducing volatility in the economy by strengthening the country’s financial reporting architecture and reducing the risk of financial market crises together with the associated negative economic impact
- enhancement of local and foreign Direct and portfolio Investment as investors are better able to evaluate corporate prospects and make informed decisions resulting in access to capital at lower costs.
- facilitating the growth of small scale enterprises as their compliance with transparent reporting will provide easier access to credit
- facilitating integration into global financial and capital markets
- improvement of public sector fiscal discipline and enhancement of value for money; and
- generation of employment opportunities.
High quality financial reporting is a building block of a market-based monitoring of companies, external auditors and other professionals whose work bear upon financial reporting integrity and corporate governance of entities; no matter how remote. This will allow shareholders and the public at large to confidently and objectively assess management performance, thus influencing their behaviour and decisions. High quality financial reporting will also contribute to national public finance by improving the assessment and collection of taxes on corporate profits.
The operating arms of the FRC are:
- Directorate of Accounting Standards – Private Sector
- Directorate of Accounting Standards – Public Sector
- Directorate of Auditing Practice Standards
- Directorate of Actuarial Standards
- Directorate of Valuation Standards
- Directorate of Inspection and Monitoring
- Directorate of Corporate Governance
(Each Directorate is managed by a team of professionals and experts as applicable)